The president of the chamber of industry is in favor of suspending the business tax, which he says belongs to a different newspaper on where local governments will get the money from. Municipalities, he said, are not saving.

Some reacted with frustration, others think so – said László Parragh, president of the Hungarian Chamber of Commerce and Industry, in an interview with Index about his earlier proposal to suspend the corporate tax.

According to Parragh, the business tax in its current form is neither fair nor equitable. It is not a coincidence that there is no such tax in Europe, at most only similar in Northern Ireland, or in the form of a business tax in Germany. Another problem is that the business tax is applied to everyone in proportion to sales, regardless of whether a business is profitable or not, and only the municipality where the business is registered benefits from it.

Since the business tax is the last major and independent revenue for local governments, Parragh’s proposal was not well received by municipal leaders (including Fidesz). In response, the president said, “this is now a state of convenience that local governments are in, it’s an automatic income for them, they don’t really have to do much. Therefore, it is not by chance that the outburst of rage that could be felt by my suggestions ”.

“Another problem is how the government provides the necessary resources to run local governments,” Parragh said. Changes related to corporation tax are not included in the 2021 tax regulations, already adopted by the National Assembly, but according to the president of the MKIK, when there is a health emergency, “it is not relevant in this way.”

According to Parragh, his experience as a company director shows that budgeting is always possible, but personally he does not feel the intention of it in the municipalities either. “It may have seemed populist, but I also asked the municipality in the capital why it needed four MPs alongside Gregory Christmas,” Parragh said. The MKIK president did not speak about whether he asked the government why Zsolt Semjén, deputy prime minister, was needed or whether it had initiated the abolition of chamber registration and membership fees, which are mandatory for all companies.

Otherwise, local governments will, of course, be forced to cut back on lost revenue.



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